Record Revenue of $133.1 Million for
Fiscal 2014
Record Full Year Gross Margin of
16%
Record Backlog of $171.6 Million at End
of Fiscal 2014
Capstone Turbine Corporation (Nasdaq:CPST), the
world's leading clean technology manufacturer of microturbine
energy systems, today announced its financial results for the
fourth quarter and fiscal year ended March 31, 2014.
Fiscal Year 2014 Highlights
- Record annual revenue of $133.1 million, up 4% from Fiscal
2013
- Record product revenue of $108.8 million, up 6% from Fiscal
2013
- Gross margin of $21.7 million, or 16% of revenue, compared to
$14.4 million, or 11% of revenue, for Fiscal 2013
- Operating loss decreased 30% year-over-year
- New product orders of $131.5 million resulting in book-to-bill
ratio of 1.2:1
- Cash balance of $27.9 million at March 31, 2014
Fourth Quarter 2014 Highlights
- Fourth quarter revenue of $36.4 million, up 3%
year-over-year
- Quarterly revenue has exceeded prior year 26 of last 27
quarters
- Record quarterly product revenue of $30.0 million, up 3%
year-over-year
- Fourth quarter gross margin of $6.1 million, up 24%
year-over-year
- Gross margin as a percentage of revenue of 17%, compared to 14%
in the fourth quarter Fiscal 2013
- New product orders of $41.2 million resulting in book-to-bill
ratio of 1.4:1
- Record product backlog of $171.6 million at March 31, 2014, up
15% year-over-year
- Record Factory Protection Plan backlog of $47.2 million at
March 31, 2014, up 35% year-over-year
President and Chief Executive Officer Darren Jamison commented,
"Capstone achieved another banner year for business development and
margin expansion in Fiscal 2014, ending the year with record
quarterly product revenue and the second highest quarter for total
revenue in company history. We also set new annual records for
revenue and gross margin while entering Fiscal 2015 with solid
backlog of $171.6 million, also a company record. The comprehensive
operational improvements we have made in recent years have enabled
us to make consistent progress along our margin improvement path
and reach stronger levels of maturity with respect to product
development and channel marketing. Overall, we continue to make
significant expansion in existing markets and inroads into
promising new markets, and our Fiscal 2014 results position us well
for continuing success in Fiscal 2015."
Fourth Quarter 2014 Financial Summary
Revenue for the fourth quarter of Fiscal 2014 was $36.4 million,
compared to $37.0 million for the third quarter of Fiscal 2014, and
$35.4 million for the fourth quarter of Fiscal 2013.
Capstone's backlog as of March 31, 2014 was $171.6 million,
compared to $160.4 million at December 31, 2013, and $148.9 million
at March 31, 2013.
Gross margin for the fourth quarter of Fiscal 2014 was $6.1
million, or 17% of revenue, compared to $7.3 million, or 20% of
revenue, for the third quarter of Fiscal 2014, and $5.0 million, or
14% of revenue, for the fourth quarter of Fiscal 2013.
Research and development expenses were $2.5 million for the
fourth quarter of Fiscal 2014,compared to $2.3 million for the
third quarter of Fiscal 2014, and $2.2 million for the fourth
quarter of Fiscal 2013.
Selling, general and administrative expenses were $6.8 million
for the fourth quarter of Fiscal 2014, compared to $7.0 million for
the third quarter of Fiscal 2014 and $6.7 million for the fourth
quarter of Fiscal 2013.
Capstone's net loss was $3.4 million, or $0.01 loss per share,
for the fourth quarter of Fiscal 2014, compared to a net loss of
$2.2 million, or $0.01 loss per share, for the third quarter of
Fiscal 2014, and a net loss of $4.1 million, or $0.01 loss per
share, for the fourth quarter of Fiscal 2013. Capstone's loss from
operations for the fourth quarter of Fiscal 2014 was $3.1 million,
compared to $1.9 million for the third quarter of Fiscal 2014, and
$3.9 million for the fourth quarter of Fiscal 2013.
Fiscal Year 2014 Financial Summary
Revenue for Fiscal 2014 was $133.1 million, an increase of 4%
from $127.6 million for the prior fiscal
year.
Fiscal 2014 gross margin was $21.7 million, or 16% of revenue,
compared to Fiscal 2013 gross margin of $14.4 million, or 11% of
revenue. The year-over-year increase in gross margin of $7.3
million was the result of overall higher sales volume of
microturbine products, lower direct material costs, and decreases
in royalty expense, warranty expense, and production and service
center labor and overhead expense compared to the prior year.
Research and development expenses were $9.0 million each for
Fiscal 2014 and Fiscal 2013. During Fiscal 2014 supplies
expense decreased but was offset by a decrease in cost sharing
benefits.
Selling, general and administrative expenses were $28.0 million
for Fiscal 2014, compared to $27.4 million for Fiscal
2013. The net increase in SG&A expenses was comprised of
increases in salaries, facilities, consulting and supplies
expenses, partially offset by a decrease in marketing expense.
Capstone's net loss decreased 28% to $16.3 million, or a $0.05
loss per share, for Fiscal 2014, compared to a net loss of $22.6
million, or a $0.07 loss per share, for Fiscal
2013. Capstone's loss from operations for Fiscal 2014 was
$15.3 million, a 30% reduction from the Fiscal 2013 loss from
operations of $22.0 million.
Liquidity and Capital Resources
At March 31, 2014, cash and cash equivalents totaled $27.9
million, compared to $31.6 million at December 31, 2013, and $38.8
million at March 31, 2013.
During the quarter ended March 31, 2014, cash used in operating
activities was $3.8 million and capital expenditures totaled $0.4
million. This compares to cash used in operating activities of $3.6
million and $0.3 million in capital expenditures during the quarter
ended March 31, 2013.
During the year ended March 31, 2014, Capstone used $15.4
million of cash in operating activities and spent $1.2 million in
capital expenditures. The compares to cash used in operating
activities of $17.1 million and $1.2 million in capital
expenditures during the year ended March 31, 2013.
Subsequent Event
On May 6, 2014, Capstone closed a public offering of 18,825,000
shares of its common stock at a price of $1.70 per share, which was
allocated to a single institutional investor. Net proceeds from the
sale of the shares, after deducting fees and other offering
expenses, were approximately $29.8 million.
"As customers continue to migrate toward larger units and larger
projects, greater working capital resources are required for order
fulfillment at our peak levels," Jamison noted. "Following our
capital raise in May, Capstone has ample flexibility to support our
backlog conversion and continue to fuel the Company's growth engine
while also meeting our quarterly financial obligations."
Jamison continued, "Additionally, on June 9, 2014, we amended
our credit facility with Wells Fargo Bank to, among other things,
increase the maximum borrowing capacity by $5 million to $20
million, amend the financial covenants, and extend the maturity
date of the domestic line of credit to September 30, 2017. We are
pleased with the ongoing commitment that we have received from our
lender and look forward to our continuing partnership with them as
we execute our growth plans."
Conference Call and Webcast
The Company will host a conference call today, June 12, 2014, at
1:45 p.m. Pacific Time (4:45 p.m. Eastern). Access to the live
broadcast and a replay of the webcast will be available for 30 days
through the Investor Relations page on the Company's website:
www.capstoneturbine.com.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST) is the world's leading producer of low-emission
microturbine systems, and was the first to market commercially
viable microturbine energy products. Capstone Turbine has shipped
approximately 7,000 Capstone Microturbine systems to customers
worldwide. These award-winning systems have logged millions of
documented runtime operating hours. Capstone Turbine is a member of
the U.S. Environmental Protection Agency's Combined Heat and Power
Partnership, which is committed to improving the efficiency of the
nation's energy infrastructure and reducing emissions of pollutants
and greenhouse gases. A UL-Certified ISO 9001:2008 and ISO
14001:2004 certified company, Capstone is headquartered in the Los
Angeles area with sales and/or service centers in the New York
Metro Area, Mexico City, United Kingdom, Shanghai and
Singapore.
"Capstone" and "Capstone MicroTurbine" are registered trademarks
of Capstone Turbine Corporation. All other trademarks mentioned are
the property of their respective owners.
The Capstone Turbine Corporation logo is available here.
Forward-Looking Statements
This press release contains "forward-looking statements," as
that term is used in the federal securities laws, about market
expansion; growth in revenue, gross margin and backlog; and the
continued partnership with our lender. Forward-looking statements
may be identified by words such as "expects," "objective,"
"intend," "targeted," "plan" and similar phrases. These
forward-looking statements are subject to numerous assumptions,
risks and uncertainties described in Capstone's Form 10-K, Form
10-Q and other recent filings with the Securities and Exchange
Commission that may cause Capstone's actual results to be
materially different from any future results expressed or implied
in such statements. Capstone cautions investors not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Capstone undertakes no
obligation, and specifically disclaims any obligation, to release
any revisions to any forward-looking statements to reflect events
or circumstances after the date of this press release or to reflect
the occurrence of unanticipated events.
– Financial Tables Follow
–
CAPSTONE TURBINE
CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
share amounts) |
|
|
|
|
March 31, |
March 31, |
|
2014 |
2013 |
Assets |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$27,859 |
$38,817 |
Accounts receivable, net of
allowances of $2,246 at March 31, 2014 and $2,142 at March 31,
2013 |
28,019 |
17,941 |
Inventories |
18,102 |
18,513 |
Prepaid expenses and other
current assets |
2,217 |
2,588 |
Total current
assets |
76,197 |
77,859 |
Property, plant and equipment, net |
2,891 |
3,543 |
Non-current portion of inventories |
2,938 |
3,252 |
Intangible assets, net |
1,790 |
2,313 |
Other assets |
302 |
371 |
Total |
$84,118 |
$87,338 |
Liabilities and Stockholders'
Equity |
|
|
Current Liabilities: |
|
|
Accounts payable and accrued
expenses |
$28,577 |
$24,121 |
Accrued salaries and wages |
1,883 |
1,721 |
Accrued warranty reserve |
2,965 |
2,299 |
Deferred revenue |
2,657 |
3,089 |
Revolving credit facility |
13,228 |
13,476 |
Current portion of notes
payable and capital lease obligations |
444 |
361 |
Warrant liability |
— |
10 |
Total current liabilities |
49,754 |
45,077 |
Long-term portion of notes payable and
capital lease obligations |
201 |
233 |
Other long-term liabilities |
70 |
142 |
Commitments and contingencies |
|
|
Stockholders' Equity: |
|
|
Preferred stock, $.001 par
value; 10,000,000 shares authorized; none issued |
|
|
Common stock, $.001 par value;
515,000,000 shares authorized, 311,520,567 shares issued and
310,377,293 shares outstanding at March 31, 2014; 305,661,276
shares issued and 304,622,573 shares outstanding at March 31,
2013 |
312 |
306 |
Additional paid-in capital |
805,342 |
796,767 |
Accumulated deficit |
(770,231) |
(753,975) |
Treasury stock, at cost;
1,143,274 shares at March 31, 2014 and 1,038,703 shares at March
31, 2013 |
(1,330) |
(1,212) |
Total stockholders' equity |
34,093 |
41,886 |
Total |
$84,118 |
$87,338 |
|
|
|
|
|
|
CAPSTONE TURBINE
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(In thousands, except
per share amounts) |
|
|
|
|
|
Years
Ended March 31, |
|
2014 |
2013 |
2012 |
Revenue |
$133,105 |
$127,557 |
$109,371 |
Cost of goods sold |
111,409 |
113,172 |
103,944 |
Gross margin |
21,696 |
14,385 |
5,427 |
Operating expenses: |
|
|
|
Research and development |
9,029 |
8,979 |
8,237 |
Selling, general and
administrative |
27,981 |
27,364 |
28,927 |
Total operating
expenses |
37,010 |
36,343 |
37,164 |
Loss from operations |
(15,314) |
(21,958) |
(31,737) |
Other (expense) income |
(20) |
25 |
31 |
Interest income |
— |
— |
2 |
Interest expense |
(712) |
(717) |
(857) |
Change in fair value of warrant
liability |
10 |
781 |
13,983 |
Loss before income taxes |
(16,036) |
(21,869) |
(18,578) |
Provision for income taxes |
220 |
694 |
186 |
Net loss |
$ (16,256) |
$ (22,563) |
$ (18,764) |
Net loss per common share—basic and
diluted |
$ (0.05) |
$ (0.07) |
$ (0.07) |
Weighted average shares used to calculate
basic and diluted net loss per common share |
307,060 |
302,168 |
266,945 |
CONTACT: Investor and Investment Media Inquiries:
818-407-3628
ir@capstoneturbine.com
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